City Council to take first look Tuesday at possible November ballot measures

Info: To read the complete memo on potential ballot measures and see the rest of the agenda, go to http://bit.ly/1meNf1v

Boulder voters could see short-term taxes to pay for capital projects and transition costs of a municipal utility, as well as a tax on vacation rentals on their November ballot.

The Boulder City Council is taking their first look Tuesday at potential ballot measures for this fall. Final decisions won't be made until this summer, with the deadline for placing measures on the ballot in August.

But every spring, the council takes a look at what they might want to ask voters to fund or approve, how likely those measures are to pass and how they stack up against measures from other government entities.

Boulder County is considering asking voters to approve a sustainability tax, which could be a property or a sales tax, and Boulder Valley School District may have a bond issue, which would be a property tax, on the ballot this year.

Two taxes with environmental impact, the utility occupation tax that funds research into municipalization and the Climate Action Plan tax that pays for energy efficiency programs and renewable energy rebates are set to expire in December 2017 and March 2018, respectively.

Often, the city looks to renew taxes well ahead of their sunset date, but in this case, Boulder Finance Director Bob Eichem said the city plans to wait and see what happens with municipalization.

City Energy Future officials have said if the city forms a municipal electric utility, energy efficiency programs and solar rebates likely would be funded out of utility rates and the tax might not be necessary.

However, Boulder may ask voters to approve a short-term tax to pay for transition costs, which the city would incur before it starts collecting rates from customers.

Eichem said the city is still doing research into how much those costs might be and the best way to fund them, and that tax may not go to the voters this year.

Boulder officials are also considering a "pay-as-you-go" capital program instead of another bond program. Boulder voters approved $49 million in bonds in 2011. However, the city has many smaller capital programs that it cannot fund right now. The idea behind the pay-as-you-go program is to do smaller programs now without incurring the extra cost of debt and interest payments.

A 0.2 percent sales tax for three years would generate $16.8 million in revenue. Collecting the tax for five years would generate $25.2 million.

Eichem said it would be important to prioritize projects for funding, since inflation in construction costs or another economic downturn could mean the taxes collect less revenue or the money doesn't go as far.

The proposed projects include University Hill streetscape improvements, undergrounding electric wires at Chautauqua, renovations at the Dairy Center for the Arts and others.

Finally, Boulder voters might be asked to approve a tax on vacation rentals by owner. VRBOs are illegal in most of the city, but many operate openly and without paying the lodging tax that hotels and motels pay. Eichem believes such a tax would not generate a lot of revenue, but registering and taxing VRBOs is important to some officials as a compliance issue.

The city could either create a new VRBO tax and peg it to the lodging tax rate or they could expanding the definition of the lodging tax to include VRBOs.